Legal Updates

Commercial Law – European Private Company – Proposed Legislation

On 25 June 2008 the European Commission announced the new Small Business Act for Europe and published a proposal for a Council Regulation on a Statute for a European Private Company.

The European Private Company will be a new type of European company form. Small and medium-sized undertakings appear to be granted the main benefit of the proposed legislation.

The European Commission has announced the new legislation as part of the development and integration of the European economy. Accordingly, the new legislation attempts to simplify the existing law.

A number of large companies and large groups of companies have also expressed interest in the proposed legislation. Many of such groups of companies structure their enterprise into holding companies, subsidiaries and lower subsidiaries, many of which are jointly owned by a number of groups and do not issue shares to the public. A European form would provide them with a set of rules specifically suited to them, which would apply across the European Union and accordingly to all the European subsidiaries of a group no matter where they are incorporated.

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© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.